04 July 2018Reading time: 2 minutes

By the end of March it became known that the private equity investment company Carlyle and the Singapore State fund GIC, have taken over the chemical division Specialty Chemicals from AkzoNobel for EUR 10.1 billion. Therefore AkzoNobel can now focus completely on its paints and coatings activities.

Meanwhile AkzoNobel is looking for acquisition candidates. In June the Romanian paint company Fabryo was taken over, which has made AkzoNobel the largest paint company within this domestic market. CEO Thierry Vanlacker has announced early July that there might come more small acquisitions this year. Vanlacker searches companies that will not cost more than EUR 150 million. AkzoNobel does not expect to merge with a peer any time soon. In 2017 PPG tried to take-over AkzoNobel. After that the Dutch paints and coatings company started talking with Axalta about a possible merger.

However, Goldman Sachs has been claiming for a while that AkzoNobel is a take-over candidate. Because of the recent divestment of the chemical division, this process could speed up according to the American investment bank. Partly because of this, by the end of June Goldman Sachs has added the paints and coatings company to its list of Western European companies which have a change of 15% or more to be taken over or to merge. Other analysts are also fairly positive about the stock.

One of the cases which could have a large effect on AkzoNobel are the commodity prices. During the past period, commodity prices have strongly increased. This could have a negative effect on the results of the paints and coatings division. It remains to be seen how this will develop. AkzoNobel also has to find a solution for its employees. In June, staff members voted against the CAO proposals of the company, because of a conflict about the pension funds. Now labour unions want to campaign in order to make AkzoNobel strengthen their pension funds with EUR 400 million. It remains to be seen if the company will meet the demands.

At this moment (02-07-2018) the stock price is 4.9% lower on an annual basis at EUR 73.70. The future price of the share is subject to several political, industrial and sector specific as well as economic factors. Investors should consider such risk when making their investment decisions. Developments can be different at any time than investors expect, which can result in capital losses.

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18/09/2019 14:03:05